Evening star. [volume] (Washington, D.C.) 1854-1972, 1887-06-27
Facts which Underlay the Panic Of
Erid0Y.

k8ctS Wn1ch Underlay the Panic Of
Friday.
PERSONAL SPITE TUE MOTIVE FOR GREAT DEAL N
sToCKs-How JAY GOULD MADE MONEY AND
GRAT1FIED HIS ANIMosTY BIZ BEARING HIS OWN
SECURITIES.
Special Correspondence of THE EVENING STAR
NEW YORK, June 27.-The financial squan that
broke over Wall street on Friday last was, In
many respects, unique among events OF its kind.
The mere statement OF the facts is enough at once
TO arouse the hveliest speculation as to its real
causes. For 1t is apparent that the stereotyped
explanation Of the great operators, slack OF con-
fldence on the part OF the public" is a meaning
less phrase, intended in this instance to cloak
motives and distract attention from the clues that
may lead to the revelation OF the truth Here,
Orieny, was season OF general business pros
per1ty, Willingness to invest on the part OF the
puollc tnat was by no means rash, healthy &C.
tivity in all enterprises railroad showings part1c-
in the prices OF some of the very Strongest stocks
represented In their chief holdings by the most
powerful and conservative man in the street. 1t
came SO Xpectedly that the brokers in the En-
change had no time to think how queer 1t was;
they could only throw up their hands and howl;
ana now most OF them are so tickled to think that
they got out OF 1t with nothing much worse than
their bowling for their fright that they have
hardly begun to consider seriously how very
queer 1t nj! was. And the causes were Queerer
tnan tie facts 1t is like royal romance with
money kings for the personages II may best be
tolu In the words OF an operator whose experience
tended.
'To begin with" he said, cit must be understood
mat no great operation in stocks can be consum-
mated unless various conditions are ripe for IT,
and when they are 1t depends upon the sagacity OF
some man OF great resources to push his scheme
the Friday panic; one normal business cause,
without which ii Is not at all probable the others
could have effected anything, and personal
cause. The business cause is plain enough. The
reserve in the banks to-day is a little upward OF
three millions. year ago it was fourteen mil
lions, and year or TWO before that it was sixty
millions. That means that the money market Is
comparatively stringent. And that was the one
CO dit1on which made 1t possible for Mr. Jay Gould
Field and incidentally to o punish ives, ssainer 4
CO. for their audacity In attempting TO rig up rail-
road deals. 1t is fact that ali the denials In the
on good terms and that Sage sides with Gould.
II anything were really needed to make one
believe this it could be found in Washington
E ConnOrS reiterated statement that Field
never keeps his word, that he is a tricky man TO
deal with, &c. AS Cohnor is Mr.. Goulds direct
representative, such words are significant. Now
as TO this Harry and its immediate personal causes
they date back to the time OF George GOuid'S mar
riage with Edith Kingdom, the actress. Funny,
isn't 1T? but it's so. Field, you know, is a good
deal OF snob; he likes nothing better than asso-
ciat1ng with nobility OF the titled kind, and he
considered it altogether breach OF caste law that
young Gould should marry an actress. He eX-
pressed his opinion to this effect without reserve
at the time, and Mr.. Could sr, was profoundly ir-
Is, Win luG mdRQdUt'S lOlR.cneTlSutU
opinion OF Mr.. Field as voiced by Mr Connor was
enough TO make a rivalry that has mad not only
business hostility, but personal spite in 1t. 1t has
been concealed, because 1t has not been for the
interest OF Field to admit any hard feeling, he
Is the weaker party, and 1t has not been in the in
terests OF Mr.. Goulds desire for revenge at sea-
Sonable opportunity TO expose his attitude. The
way the dow was struck, therefore, was this, and
1t partakeS or the old, old way In which Gould and
sage have for years manipulated the market.
"rheSe two giants borrowed all the money In the
market to start With. Then they called in their
loans, and Mr.. Gould naively said in explaining
that act that he found he could loan his money to
better advantage than would result from letting it
lie where IL was. The banks meanwhile wnere
made to do their part in the operation. They had
loaned great deal OF money on Manhattan stock
as security. They always prefer mixed security,
that tS to have Various stocks In pledge for their
Gasa rather m dnan lone one STOCK only M snzt Was
security was TO intimate that raid was to be
made on II, that the price would be driven down.
tS,s !ne %sh
would not keep Manhattan 50 much TO the fore as
security; we are holding more than we want;
please substitute some otner line or stock for IT.
That was the nrst great starter; men found that
they could not borrow on Manhattan. Then 1t
was Sage's turn to act. On Friday morning he held
1000 shares OF Manhattan that he had told Mr..
Field should not be sold Mr. Sage sold every share
OF them. Now wnen Field saw bis favorite stock
going to smash as II did very promptly under these
was worth in order to sustain the market 1t is ap-
parent, OF course, that. 1t was the aim or Gould
task tnsn he could accomplish. And as a matter
OF fact no man was ever 80 near failure as cyrus
on that Friday afternoon. He had to go to the
direst straits 10 raise money for purchasing Man.
haitian, and when he purchased II he had to do SO
at loss Of half miiDon or so. That he did
purchase it is shown by the action OF W. P. Wight
& Co. firm that bought 9, 900 shares OF Manlat-
tan on Friday. Field is the only man who could
have given such an order, and though the opera
tion was somewhat cioaAea IL Is clear, Tor IN the
firm OF Wight CO. is Arthur Claflin, former
associate and friend OF s. V. White, and White is
Fields principal broker. And Fields straghts are
shown by the fact that he pledged for money on
that day certificates OF stock issued In 1854 In
which there was not p1nhole. pinhoie lndi-
Gates that the certificate has been used as security
for loan, and the fact that Field had TO 60 down
into his pockets for security of that kind is re-
markably significant. Now don't think Tor min
ute that Mr.. Gould Or Mr.. Sage lost anything by
the depression OF this stock. They bought 1t In at
low fgures when they had carried their game as
far as was practicable. And the incidental tumble
given to the other Gould stocks resulted In just
The same thing. These two men made o great
deal by the turn, the bears OF the market, and
there were some like Henry Clews made good
the allied to Field sso sns
and the extent is not yet known. Why, on Satur-
day morning there were We'll credited rumors about
to Exchange that s. v. White was in tangle and
"As to Ives, Stainer Co., their interests were
sadly damaged In the general effect OF the deal on
lows, and so could not stand the racket The atti-
tude OF Gould and Sage to them Is shown clearly
enough IN the iact tldC Ives WHO was, OF course,
compelled to borrow by the turn given to affairs,
asked Sage to lend him the money he needed and
Sage refused.
s.And there you have in brief the facts OF the
furry. And NOT one OF them is more solid than the
bad blood between Field and Gould. Personal
feeling frequently is factor in stock operations
but it rarely serves as the basis for transactions
involving such immense sums OF money as II did
here. F. X. BURTON"
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District Government Affairs.
PUTTING n MORE HARDY VARIETY OF SHADE TREES.
Commi ssi0ner Ludlow says that as fast as
possible the box elder and poplar trees are being
removed from the streets and replaced by other